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Points |
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Points are fees that are charged by a lender in order to reduce
the interest rate on your loan (1 point = 1% of the loan amount,
2 points = 2% of the loan amount etc.) Typically, buyers
compare the difference in the monthly payment and divide the
dollar cost of the points to reach a break even point. Points
may also be used to buy out a prepayment penalty, when applicable,
giving the borrower the freedom to refinance as interest rates
decrease.
Points are tax deductible in the year in which they are paid
or they are prorated for refinance transactions. For further
information, consult with your tax advisor.
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Insurance
Homeowners Insurance
When you insure your home, you should insure your home for the total amount it would cost to rebuild your home if it were destroyed.
Private Mortgage Insurance - PMI
Private mortgage insurance is a type of insurance that helps protect the mortgage company against losses due to foreclosure. This protection is provided by private mortgage insurance companies and allows mortgage companies to accept lower down payments than would normally be allowed.
PMI Cancellation
Mortgage insurance can usually be canceled by the home buyer after he or she has at least 20 percent equity in the home. Borrowers should contact their servicer to find out the procedure for canceling mortgage insurance when they think they have achieved 20 percent equity.
PMI Payment Options
Private mortgage insurance can be paid on either an annual, monthly or single premium plan. Premiums are based on the amount and terms of the mortgage and will vary according to loan-to-value ratio...
PMI vs FHA MIP
Although the insurance protection concept is similar, there are differences between private mortgage insurance and FHA mortgage insurance. FHA insurance is a government-administered mortgage insurance program that does have certain restrictions.
Title Insurance
A policy of title insurance is a contract of indemnity between the insured and the insuring company relating to the title to the land described in the policy, protecting the insured against loss of damage by reason of defects...
Title Insurance Protection
Title Insurance insures that the "record" title is good subject only to the exceptions expressly set out in the policy. lt also insures against certain matters which do not appear of record, such as forgery, identity of parties...
Title Insurance Policy
An owner's policy protects only the owner while a mortgage policy protects only the holder of the mortgage on the property. Separate policies are required to protect both interests.
Flood Insurance
Flooding is not covered by a standard homeowners insurance policy.
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Third Party Fees |
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Fees that we consider third party fees include the appraisal fee, the credit report fee, the settlement or closing fee, the survey fee, tax service fees, title insurance fees, flood certification fees, and courier/mailing fees.
Third party fees are fees that the lender will collect and pass on to the person who actually performed the service. For example, an appraiser is paid the appraisal fee, a credit bureau is paid the credit report fee and a title company or an attorney is paid the title insurance fees.
Typically, you'll see some minor variances in third party fees from lender to lender since a lender may have negotiated a special charge from a provider they use often or chooses a provider that offers nationwide coverage at a flat rate. You may also see that some lenders absorb minor third party fees such as the flood certification fee, the tax service fee or courier/mailing fees.
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